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LEX LOCI

LEX LOCI

Court four times.

Court four times. Despite the case’s propensity to bounce up and down between courts, it is fundamentally a dispute over the enforcement of the Carleton’s creditor status after the defendant filed articles of dis‑ solution of a real estate holding company called MTS. Carleton was a 50‑percent shareholder of MTS. The remaining two shareholders were in the Balagur family. In 2004, Carleton sought to dissolve MTS, and, in response, one of the Balagurs successfully moved for an election to purchase Carleton’s shares in lieu of dissolution of MTS. A trial was then held to determine the value of Carleton’s shares. Thereafter, the Balagurs (now the only shareholders)successfullymoved to terminate Carleton’s rights, making Carleton a secured creditor of MTS for the value of the shares purchased. However, it appears that the Balagurs had a change of heart (possibly induced by the amount of money they would have to pay Carleton) and filed a request to adopt the articles of dissolution. Essentially, they sought to retract their election to purchase shares from Carleton. Carlton, probably seeing its profit from the sale of the shares vanishing, objected and argued that the election to purchase the shares was irrevocable. It also asked the trial court to enforce its creditor status and requested an accounting of MTS. The trial court denied all of Carleton’s requests, and appeal followed. The Court affirmed the decision below. The fundamental analysis turned on the interpretation of New Hampshire’s corporate shareholder’s “election” statute, RSA 294‑A:14.34. Under this statute, even after a purchase of sales is ordered by the Court, if the remain‑ Advertise with the NH Bar Association Winter 2013 Reduced Web and Print Display Ad Rates Help You Get Back on the Road to Success! NH Bar News Ads as Low as $60! New Advertising Packages Diversify Your Placements for Maximum Eectiveness Call Today - 603-715-3263! Kickstart Your New Hampshire Bar Journal ing shareholder files for voluntary dissolution in a timely manner, the previous order “shall no longer be of any force or effect.” A tough result for Carleton, indeed. In affirming the trials court’s order, the Court held that once Balagur filed its articles of dissolution, the prior court order valuing and ordering the sale of Carleton’s shares was voided as a matter of law. Thus, Carleton’s status as a secured creditor ceased to exist. The Court held that Balagur’s initial election to purchase shares was not irrevocable (as is that case on other states). The Court reasoned that had the Legislature wanted to make the election irrevocable, it could have included such language in the statute. Instead, the Legislature adopted the Model Business Corporations Act, which allows for a revocation of the election. It was clear that the Supreme Court was concerned about the result compelled by the statutory analysis in this case. The Court, expressing its concern that inequitable results could flow from its opinion, surmised that a shareholder, intent on avoiding dissolution, could file an election to purchase the shares, only to revoke the election when the shareholder does not like the assessed value of the shares. To curb this practice, the Court went out of its way to point out that trial courts have the authority to award “reasonable fees and expenses” to someone in Carleton’s position. Randall v. Abounja, decided Jan. 11, 2012, stems from a landlord tenant dispute in which the landlord failed to provide heat to the ten‑ ant’s apartment for 18 days, resulting in an $18,000 judgment against BETTER DAYS A H E A D 53

the landlord. In March 2011, Ms. Randall was a tenant in a building owned by the defendant, Abounja. Randall complained to the City of Rochester that the defendant was not providing heat to her apartment. This prompted two visits by the city’s code enforcement office. Both inspections revealed that the master bedroom had no heat and that a separate electric heat register was inoperable. The city sent two letters to the defendant, which he ignored. When the city official met with the defendant in person, despite the chilly air in the bedroom, things got heated during the meeting. The city inspectors broke off the meeting because of the hostility. On April 12, approximately two weeks after reporting the problem, Ms. Randall filed her complaint in the district court (… ahem… circuit court, district division), which issued a temporary order that day. After a hearing, the trial court found that the landlord had will‑ fully interrupted the provision of an essential utility to the plaintiff. Under RSA 540‑A:4, the court found that Ms. Randall was entitled to recover the statutory assessment of $1,000 per day for a willful viola‑ tion, for a total of $18,000. On appeal, the Court upheld the finding of a willful violation, but found plain error in the assessment of the statutory damage award. Our Court rarely finds plain error, but in this case, the statute (cited supra) expressly allowed for a statutory award “in the amount of actual damages or $1,000, whichever is greater” per day of a willful violation “after issuance of a temporary order.” RSA 540‑A:4,IX(a). In this case, the district court had calculated the damage assessment starting on March 28, almost two weeks prior to issuance of the temporary order. The Supreme Court could not let this error stand. The Plaintiff tried to convince the Court that the issue about the propriety of the damage award was not preserved for appellate review. The Court correctly pointed out that that is precisely what the plain error rule was enacted to address – that, in essence, Court has the inherent authority to right a wrong, no matter where it occurred. Author Attorney David W. Ruoff is a partner in the firm of Howard & Ruoff in Manchester, and splits his practice between criminal defense in state and federal courts, and civil litigation. He was formerly an Assistant Attorney General, Assistant Rockingham County Attorney, and a staff attorney with the New Hampshire Public Defender. This article combines cases from the summer and fall of 2012. 54 New Hampshire Bar Journal Winter 2013

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